ESG Risk Assessment and Integration of ESG Factors into Supplier Selection
EGCO Group considers sustainability assessment results and ESG factors when selecting and screening suppliers to ensure suppliers can deliver raw materials and services that meet our company’s standards and expectations. In the process, potential suppliers complete a self-assessment questionnaire (SAQ) that covers the following topics:
Quality of products and services, innovation management
Good corporate governance, data leakage prevention, law compliancy
Environmental management system, environmental projects, environmental regulations violation prevention
Social aspects including Labor regulations and human rights compliance, equal treatment, personnel development
Occupational health and safety management system, accident prevention and reporting
Critical/ Significant suppliers with a sales volume exceeding 5 million THB and an SAQ score of over 50% can be registered into EGCO Group’s Approved Vendor List. On the other hand, those with a score below 50% are required to prepare a corrective action plan prior to being approved as EGCO Group’s supplier.
Example of Supplier Screening and Risk Assessment
| Country | Activity | Description of Activity | Human Rights Issues | |||
|---|---|---|---|---|---|---|
| Country Level | Sector Level | Commodity-Specific Level | Individual Human Rights Risk | |||
| Thailand | Power | Generate and supply electricity, steam, and processed water to its customers. |
Political upheavals and coup: With the general election in Thailand anticipated in May 2023, tensions that have sparked unrest in the country in previous years remain unresolved, despite declines in particular types of political violence and demonstration events in the past year. Political disorder in Thailand ranges from violence involving separatists in the Deep South to demonstrations over the continued presence of the monarchy and the military in politics. (https://acleddata.com/2023/02/23/anti-government-demonstrations-and-separatism-in-thailand-political-disorder-trends-ahead-of-the-2023-general-election/) Arbitrary and secret detention: Unlike in previous years, there were no reports that the government or its agents committed arbitrary or unlawful killings. There were reports of killings by both government and insurgent forces in connection with the conflict in the southernmost provinces. (https://www.state.gov/wp-content/uploads/2023/03/415610_THAILAND-2022-HUMAN-RIGHTS-REPORT.pdf) Violence and abuses in southern boarder provinces: Internal violence continued in the ethnic Malay-Muslim-majority southernmost provinces. Frequent attacks by suspected insurgents and government security operations stoked tension between the local ethnic Malay-Muslim and ethnic Thai[1]Buddhist communities. Enforced disappearances: On October 25, 2022, the Prevention and Suppression of Torture and Enforced Disappearance Act went into effect, providing benchmarks to end impunity and criminalize torture and enforced disappearance. While some nongovernmental organizations (NGOs) expressed concern that the final version of the bill was weakened, opposition political parties and civil society generally considered the passage into law a significant achievement. Refugees, asylum seekers, and migrant workers: The government generally cooperated with UNHCR, the International Organization for Migration, and other humanitarian organizations in providing protection and assistance to refugees, asylum seekers, stateless persons, and other persons of concern, although with many restrictions. |
Core operations >Health and safety: Organizations should acknowledge the potential hazards to health and safety and implement necessary measures to prevent accidents and mitigate their impacts. > Security of operations: This covers the activities undertaken by a company or their contractors to protect their assets and ensure the safety of their employees. Power stations can become a target of demonstrations organized by environmental and community organizations. Supply chain > Fuel sourcing: Purchasing of coal, natural gas, and biomass all have risks associated with them. > Other key products and services: As well as purchasing supplies, the power generation sector uses contractors and sub-contractors at various stages. Communities > Property rights and land acquisition: Communities may need to be relocated if their current location is to be re-developed for a power generation plant. In such cases, the community's requirements may encompass housing land, agricultural land, access to fisheries and traditional livelihoods, as well as land for community activities. > Access to resources: Energy production accounts for 15% of the world's water usage. It also uses a lot of other resources. |
Health and safety: Workplace conditions, particularly health and safety in the workplace. Communities: Power stations, whether coal-fired, nuclear, biomass, or renewable energy plants can be a source of potential environmental and health and safety risks which affect workers and local communities. Supply chain: Standards for contractors/sub contractors and suppliers related to human rights requirements and health and safety (e.g. child labor, forced labor, etc.). Climate Change: Climate change impacts can introduce uncertainties and volatility into commodity markets. Extreme weather events, such as hurricanes, droughts, or floods, can disrupt commodity supply chains, leading to price fluctuations and potential shortages. Changes in consumer preferences and regulations aimed at mitigating climate change can also influence demand for commodities, impacting their prices and market dynamics. |
3 Right not to be subjected to slavery, servitude or forced labour 8. Right to access to effective remedies 15 Right of protection for the child 21. Right to freedom of association 24 Rights to work 25 Right to enjoy just and favourable conditions of work 26. Right to form and join trade union and the right to strike 27. Right to an adequate standard of living 28 Right to health 35 Rights of minorities |